The main Bitcoin layer-2 (L2) network, Stacks, has hit a significant milestone with its highest number of active users so far. In April, Stacks reported a record high of 122,497 active accounts, showing a growing interest in Bitcoin-based decentralized finance (DeFi). This increase comes after the 2024 Bitcoin halving and the introduction of Runes, a new protocol for issuing fungible tokens on the Bitcoin network.
The surge in active accounts indicates a rising appeal to Bitcoin DeFi, or BTCFi, as Bitcoin users explore different financial opportunities. According to Andre Serrano, the product and partnership manager at Stacks, the rising fees on the Bitcoin network are likely to drive smaller transactions towards Bitcoin Layer-2 networks. Serrano highlighted the significance of L2s for Bitcoin, mentioning that the issuance of assets on Bitcoin Layer-1 (L1) would lead to higher transaction fees, making L2s essential to accommodate more users and activities.
Bitcoin L2 networks like Stacks are vital for the growth of Bitcoin DeFi, as they enable lower transaction fees and provide more use cases for the original blockchain network. Stacks allows the creation of smart contracts on the Bitcoin network, expanding the capabilities of Bitcoin. L2s are considered a way to overcome the existing transaction limitations of the Bitcoin network.
The increasing interest in BTCFi has generated excitement in the cryptocurrency community. With ongoing development, BTCFi has the potential to reach the levels of innovation seen in Ethereum-based DeFi, as noted by Nash Lee, co-founder of MerlinSwap.
